Location Decisions of Spin-offs from Public Research Institutions

Abstract

Researchers who start their own businesses are expected to locate close to the parent organisation (i.e. universities, public research labs) in order to benefit from spillovers, thus transferring localised knowledge into the regional economy. However, empirical evidence on location patterns of public research spin-offs is rather limited and usually restricted to case studies for certain universities and regions. This paper provides a comprehensive analysis of the spatial distribution of new firm formations by researchers from universities and public research organisations, based on a representative data set for Germany. It shows that location patterns of public research spin-offs do not differ from other new firm formations. Proximity to the parent institution is of little significance for location decisions, whereas spin-offs are attracted by locations with a high number of potential customers and a large supply of highly qualified labour. Public research spin-offs rather contribute to an interregional than to an intraregional knowledge transfer.